SH Kelkar & Co, a Mumbai-based maker of fragrances and flavours, has received its board’s approval to acquire the flavour division of the Gujarat-based food essence and colour maker Gujarat Flavours Pvt. Ltd for Rs 14.5 crore ($2.1 million).

The company, through its affiliate Keva Flavours Pvt. Ltd, will be acquiring the flavour unit of the GFPL, marketed under the brands Three Birds and Wheel. The acquisition would be on a slump sale basis, it said in a stock exchange filing.

The acquisition would help broaden the group’s flavour business, it said.

SH Kelkar is undertaking a preliminary financial and legal due diligence before finalising the deal by the end of this year.

GFPV, which was launched in 1982, also deals in food colours, saccharin and fine chemicals. These products are being sold under the brands such as Maharaja and Asian. It has a sole manufacturing unit in Vadodara and claims to have a pan-India presence.

It posted net sales of Rs 10.49 crore in FY2015-16 compared with Rs 9.77 crore a year before. The company’s flavour division contributed less than 10% of its sales during the year.

The firm, which is promoted by the Vaze family with Ramesh Vaze as chairman, is among the top five players in the fragrance and flavour space in India and the top domestic manufacturer. Its main rivals such as Givaudan, IFF, Firmenich and Symrise are all multinational firms.

The company’s flavours are used as a raw material by producers of baked goods, dairy products, beverages and pharmaceuticals. It has about 300 customers for flavours, including Britannia India, VICCO Laboratories and Vadilal Industries Ltd.